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UK manufacturers call for job support to be extended

07 September, 2020

Britain’s manufacturers are calling on the Government to extend its Job Retention Scheme (JRS) or risk losing key skills that will leave the UK in the slow lane behind its major competitors as industries recover from the pandemic.

The manufacturers’ association Make UK has made the call on the back of its latest Manufacturing Monitor survey which reveals that 62% of companies want an extension, with fewer than 14% disagreeing.

Furthermore, almost a quarter of the 226 companies surveyed (22.8%) disagree with the Government’s decision to end the Scheme and say that it should be extended to critical sectors, while 17% believe it should be extended to any business. A further 25.9% say it should be continued if there are further lockdowns or a second wave of the virus, while 17.9% say the scheme should end but another support scheme should be put in its place.

Make UK argues that extending the scheme may help avoid a second wave of redundancies which the survey reveals are in the pipeline. More than 42% of the companies surveyed report that they have already made redundancies, while 30.2% say they intend to cut jobs in the next six months, and 35.6% saying they may do so.

Make UK believes that the aerospace and automotive sectors are most in need of an extension. They are at the cutting edge of technologies which will be vital to future growth, employing many highly skilled, well-paid people. Analysis by Make UK shows the two sectors are the largest investors in research & development, accounting for 36.4% of the total spend – worth £5.9bn to the UK economy. The sectors are also among the hardest hit by the pandemic, with many job losses already announced and output forecast to fall by 33% (a £4.6bn loss in value) and 14% (£1.1bn loss) respectively.

Make UK points out that Belgium has extended a similar scheme until the end of 2020 and Germany to the end of 2021, while the Australian Government is extending its JobKeeper Payment programme until March next year. France has introduced a new long-term short-time work scheme for companies facing a lasting drop in their activity, on top of an earlier short-time work scheme which will be still available.

“The protection of key skills should be a strategic national priority as this will be the first building block in getting the economy up and running,” says Make UK chief executive, Stephen Phipson. “Ensuring that those sectors which are at the forefront of technology and will provide the growth sectors and high skill jobs in recovery, should receive the greatest support possible.

“The starting point for this should be an extension of the Job Retention Scheme to those sectors which are not just our most important but who have been hit hardest,” he adds. “Failure to do so will leave us out of step with our major competitors and risk a loss of key skills when we can least afford to do so.”

The survey suggests that 17.6% of UK manufacturers are now operating at full capacity, while a further 28% are operating 75–100% of capacity. More than a quarter (27%) expect to be at full capacity at the start of 2021, while a further 35.4% expect to be operating at 75–100% capacity.

The number of companies predicting that a return to normal trading conditions will take 12 months or longer has dropped. Having been on a steadily upward trend from 16% in April to 42% in the previous survey, the figure has now dropped to 36.7%. That is still more than double the level in the first tracker, but Make UK hopes that it may be the start of a more encouraging downwards trend.

Make UK argues that the automotive and aerospace sectors are most in need of an extension to the Job Retention Scheme
Photo: Jaguar Land Rover

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